In re Glen Iron Works

20 F. 674, 17 Phila. 551
CourtUnited States Circuit Court
DecidedJune 6, 1884
StatusPublished
Cited by3 cases

This text of 20 F. 674 (In re Glen Iron Works) is published on Counsel Stack Legal Research, covering United States Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Glen Iron Works, 20 F. 674, 17 Phila. 551 (uscirct 1884).

Opinion

Bradley, Justice.

This is a bill of review under the bankrupt law of 1867, brought by the assignee in bankruptcy of the Glen Iron Works to review the decision of the district court upon the claim of Charles W. Cooper and others as attachment execution creditors. Cooper and the other respondents obtained a judgment against the corporation of the Glen Iron Works in the court of common pleas of Lehigh county, in January term, 1871, for $25,000, on which an attachment execution was issued on the first of January, 1875, with a clause of scire facias against stockholders of the corporation holding stock therein, on which only 20 per centum had been paid, the object of the attachment being to garnishee the unpaid balance. The attachment was served upon the corporation and the garnishees on the second of January, 1875. On the third of March, 1875, a creditor’s petition was filed in the district court of the United States to have the corporation declared bankrupt; it was adjudicated such on the thirtieth of March; and on the fifth of May, Wilbur, the assignee, who brings the present bill of review, was appointed assignee in bankruptcy. In November, 1875, the assignee brought suits at law in assumpsit in this court against the several stockholders of the corporation to recover the amount of their unpaid subscriptions to the stock, to-wit, the remaining 80 per cent. The suits were tried and disposed of upon affidavits of cause of action and affidavits of defense filed. It was alleged in the former that the corporation was insolvent, and in the affidavits of defense that there was no assessment, either by the board of directors of the corporation or by a court, and without such assessment there was no liability on the part of the defendants to pay the unpaid stock. The court held the defense good, and suggested that the proper mode of proceeding was by bill in equity against all the stockholders. The actions at law were thereupon discontinued, and a bill in equity was filed in the district court, which resulted in a decree that the stockholders should pay the -whole amount of their unpaid subscriptions. One of the defenses, set up by the stockholders in the equity suit was the service upon them of the attachment executions, which they allege their liability to pay, if they wore liable at all, on their unpaid subscriptions. But the court, speaking by Judge Cadwallader, (Wilbur v. Stockholders, 35 Leg. Int. 346,) decided that the attachment executions, which were prior to the commencement of the proceedings in bankruptcy, could not prevent the entering of the decree or its enforcement; but that the [676]*676decree would be made without prejudice to the rights (if any) of tfie respective attaching creditors; and that they might, if so advised, intervene for their own interests. This decree was affirmed by the circuit court on appeal the twenty-sixth of April, 1879, and the assignee collected the fund, or so much of it as was collectible. On the second of April, 1881, the attachment execution creditors, acting upon the suggestion of the court, intervened in their own behalf, presented before the register in bankruptcy proof of their judgment, their attachment execution, and the service thereof on the stockholders, and claimed that the said attachment should be paid out of the money recovered by the assignee. The register decided against the claim, holding that the debt arising upon the unpaid subscriptions was only due, under the contract of subscription, in case of an assessment, and no assessment having been made in January, 1875, when the attachment was served, there was nothing in the hands of the garnishees due the corporation, and nothing passed to the execution creditors. The register’s report was made March 31, 1883. 17 Fed. Eep. 324. The district court overruled this decision of the register, allowed the claim of the attachment execution creditors, and referred the matter back to the register, with directions to make a new report in accordance with its opinion. This being done, and a decree in favor of the execution creditors being entered, the assignee brought the. present bill of review to reverse that decree.

A preliminary question is raised as to the right of the assignee to bring the'bill of review. On this question, however, we have but little difficulty. The section of the bankrupt law which gives to the circuit court power to review the decisions of the district court in matters of bankruptcy (Eev. St. § 4986) declares that “the circuit court for each district shall have a general superintendence and jurisdiction of all cases and questions arising in the district court for such district when sitting as a court of bankruptcy, * * * and, except when special provision is otherwise made, may, upon bill, petition, or other proper process of any party aggrieved, hear and determine the case as in a court of equity.” It is contended that the assignee is not “a party aggrieved” within the meaning of the law; that it is a question of distribution of proceeds among the creditors, and that only creditors, namely, general creditors, opposed to the claim of priority on the part of the attachment creditors, are the parties aggrieved. But while the general creditors may be proper parties to file the bill, in our judgment, the assignee is also a proper party, for the reason that the claim of the attaching creditors is put forward as paramount to his rights, and as standing upon a superior title. The assignee represents the general estate of the bankrupt corporation; but the attaching creditors claim that they have a lien on portions of that estate, to which the interest of the assignee, as transferred to him from the corporation by operation of law, is subject. The assignee, in the interest of' the general creditors, opposes [677]*677this lien, and claims to hold the estate free from it. And while we think, therefore, that he is a proper party to file the bill, it is certainly more convenient and less expensive for him to do it than for the creditors to do it, either jointly or separately. The terms of the act ought to he construed liberally in this regard, in order that the proceedings may not be befeated by technical objections as to parties, and that the interest and convenience of all may be subserved. If it be apprehended that the assignee might carry on litigation when the creditors were indisposed to do so, it is no more than might happen in reference to all the interests of the estate in his charge, and their wishes could at any time be made known to the court, and would undoubtedly be prevailing when expressed by those entitled to weight and importance in the administration of the estate.

Another matter proper to bo disposed of before proceeding to consider the principal question in the case, is the point made by the as-signee, that the attachment proceedings were waived by the issue of a ji. fa. and levying on and selling tho real estate of the corporation pending the proceedings in bankruptcy. But we are satisfied that under the state law there is no objection to the suing out of contemporaneous executions. And so far as the bankrupt iaw is concerned, if a judgment creditor levies on a portion of the bankrupt estate on which his judgment is a prior lien, lie may, perhaps, be enjoined from proceeding; but if no action is taken by the bankruptcy court we do not see how such a levy can affect a fixed lien which he has on other property, unless he makes his debt out of that levied on. In the present case, the real estate being incumbered to its full value, only a hundred dollars were realized by the sale, and neither tho bankruptcy court, nor the assignee, nor the creditors, seem to have troubled themselves about the matter.

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Bluebook (online)
20 F. 674, 17 Phila. 551, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-glen-iron-works-uscirct-1884.